@drivas88 wrote:
This particular code is on 12C to be exact. 12A has code DD and 12B has code D, which applies to my current employer. I have asked my current employer about the code on 12C and they have no idea where this came from. I even looked on previous W-2's from previous years and this dollar amount never appeared on other years. :( When I filed my taxes through Turbotax, it said I could "Withdraw" these funds, to avoid being taxed. I just want to know WHO is reporting these funds, to either withdraw them or move them somewhere else, if needed. Hope this explains it better.
If you have a dollar amount in box 12c with code "W", that indicates your employer made an HSA contribution, or that you made an HSA contribution via payroll deduction. If that is wrong, and you don't get it corrected, the IRS will send you a bill for taxes and penalties. Either the employer gave bad information to their payroll company (ADP?) or ADP pulled bad info from thin air. Either way it must be corrected. I can't tell you how to navigate that bureaucracy other than your employer needs to tell the payroll company that your W-2 is wrong and needs corrected. If neither party will take responsibility, you might try making a compliant to your state labor board, since this mistake will cost you taxes and penalties if it is not corrected.
If you want to file before receiving the corrected W-2, use the substitute W-2 procedure but expect the IRS to eventually send you a bill for the tax and penalty on the HSA amount.
The penalty for having an excess contribution (which is what this looks like) is a percentage of the excess contribution, or a percentage of the funds in your account, whichever is smaller. You could have avoided the penalty by withdrawing all the money and closing the account before May 17, but now it's too late, and if you withdrew money without using it for qualified medical expenses, the penalty for that is 3x bigger than the penalty for making an excess contribution.
There's no point calling the IRS. They only know what the employer tells them by way of the extra copy of your W-2 that got sent to the IRS. That's why you need someone to take responsibility and issue a corrected W-2.
